Farmland values increase

By Editor | September 2, 2010 |

Farmland values in Illinois recovered from a mild hiccup in 2009, and so far this year have returned to an upward trend that began after the 1980s farm crisis, according to a recent article in FarmWeek.
The annual land values and cash rent report, released in August by the U.S. Department of Agriculture, showed Illinois' farm real estate value, a measurement of the value of all land and buildings on farms, increased by $120 per acre from 2009 to 2010. Land now averages $4,650 per acre.
Meanwhile, the value of cropland in Illinois increased $150 per acre from 2009 to 2010, moving to an average of $4,820. The value of farm real estate and cropland in Illinois declined slightly in 2009 after reaching historic highs in 2008.
"I think it's dependent on where you are at, but generally, land values continue to hold strong," said Bret Cude, a farm manager with Farmers National Co. in Nashville, and president of the Illinois Society of Professional Farm Managers and Rural Appraisers.
Nationwide, the average value of farm real estate ($2,140 per acre) increased 1.4 percent this year, compared to 2009, while the average value of cropland ($2,700 per acre) increased 1.1 percent.
Farm real estate values not only were strong in Illinois so far this year (up 2.6 percent), but also increased by a range of 1.3 percent to 2.4 percent in all states bordering Illinois – with the exception of Wisconsin, where the farm real estate value this year slipped 0.8 percent.
"It's a challenge determining prices because there's not much selling right now," said Cude, who reported that farmers remain the top buyers of farmland. Interest from outside investors generally is on the rise. "What other investments can you get that held or increased in value in the past 24 months?"
The average cash rent also increased from 2009 to 2010, the USDA reported. The average cash rent in Illinois this year is $169 per acre, up 3.7 percent from a year ago.
Nationwide, the average cash rent this year is up 3 percent.
Cude believes that rates for recently negotiated cash rent agreements will remain stable this fall, while the rates for older lease agreements could increase.